RIYADH: UAE non-oil companies recorded their fastest increase in new orders in nearly two years in January, signaling strengthening private-sector demand, an economic tracker showed. 

According to the latest Purchasing Managers’ Index report released by S&P Global, the Emirates’ PMI reached an 11-month high of 54.9 in January, up from 54.2 in December. 

Any PMI reading above 50 indicates expansion in non-oil business activity, while a reading below 50 signals contraction. 

The sustained growth of the non-oil sector in the UAE mirrors a wider trend across the Middle East and North Africa, where countries are pursuing economic diversification to reduce reliance on crude revenues. 

Saudi Arabia is leading the region in non-oil business activity, with the Kingdom’s PMI reaching 56.3 in January, driven by output growth, improving market conditions, and stronger client demand. 

David Owen, senior economist at S&P Global Market Intelligence, said: “UAE’s non-oil economy started the year on a solid footing, as new orders increased steeply, prompting firms to lift output and sharply expand their purchases.” 

He added: “Stock levels were also boosted as lead times decreased rapidly, allowing companies to reduce some of the strain on business capacity.” 

According to the report, the increase in new order volumes in January was the fastest in 22 months, driven by stronger domestic demand and positive responses to new products and services. 

Survey panellists said rising new business stimulated activity, while some pointed to improving economic conditions, particularly in sectors such as real estate and technology, as drivers of non-oil growth in January. 

S&P Global added that new export orders recorded only a modest rise during the month. 

Despite stronger sales growth, non-oil firms tightened their price margins in response to competition, resulting in only a marginal increase in average selling prices. 

“A steep increase in purchasing activity, the largest in six-and-a-half years, had a strong impact on input prices in January. Cost inflation across the sector climbed to an 18-month high, with firms facing higher charges on a range of materials,” said Owen. 

He added: “Selling prices saw little movement, suggesting that firms are having to absorb higher costs to avoid losing out in a rapidly growing, but competitive, market.” 

Looking ahead, non-oil firms in the UAE expressed optimism, with business expectations rising to their highest level in 15 months, supported by improving demand conditions and expansion plans. 

In the same report, S&P Global said new business growth in Dubai hit a 22-month high in January. 

Businesses in Dubai’s non-oil private sector saw operating conditions strengthen markedly as client spending improved and confidence grew. 

The rate of sales growth among Dubai firms accelerated to its fastest pace since March 2024. 

The upturn prompted faster hiring and renewed stockpiling. Although total activity growth slipped from December, it remained steep overall, the report said, adding that firms’ outlook improved to a four-month high as they projected further increases in client demand. 

In a separate report, S&P Global revealed that Lebanon’s private sector expansion lost momentum in January, with the country’s PMI reaching a six-month low of 50.2, down from 51.2 recorded in December.

January’s slowdown reflected more subdued trends in both business activity and new orders, with the former stagnating and the latter rising at a considerably softer pace than in December.

“Lebanon PMI for January 2026 fell to 50.1 from 51.2 in December 2025, yet it remained marginally above the 50 threshold. As such, output was unchanged in January due to limited new order inflows, along with a continued marginal deterioration in foreign clients’ orders,” said Helmi Mrad, senior research analyst at BLOMINVEST Bank.

According to the analysis, Lebanese businesses reported an increase in purchasing costs, while output charges were raised as firms sought to protect margins.

Survey panellists revealed that cancelations, postponements, and sluggish investment activity weighed on sales performances in January.

The survey also found that demand from international clients weakened during the first month of the year.

Private sector companies in Lebanon reduced their purchases of raw materials, intermediate goods and other necessary items at the start of the year, marking the first month-on-month decline since July 2025.

Looking forward, surveyed businesses remain pessimistic regarding business sentiment in the upcoming 12 months due to possibilities of escalating military conflict.